AdWords keyword quality

I have a campaign targeted just for Slovakia with all keywords in slovak language. About week ago when I have set-up this campaign, $0.10 max CPC was enough, but now it keeps increasing. Every day some of the keywords become inactive, with required max cpc of $0.50-$1.00!
Why? Google is not showing any other ads for these keywords. I have raised CPC several times, but it was effective only for about one day and now they are again inactive....

Could you and Google be in a 2-man auction?

This is a tricky one.
Unfortunately it could be for a number of reasons.

1. Email Google and ask them what the problem is if any.
2. Check your daily budget and increase it if necessary. You 't end up paying more for your keywords and clickthroughs anyway if noone is bidding against you because of Google's smart bidding which ensures you never pay more than you have to.
3. Continue to refine your keywords and produce better quality targeted ads.

In summary though ... see what Google advises.

Have you written the content properly?. Optimized content is what will reduce your cost per click. Try to optimize your content. For me , for all sites i manage the cost per click comes mostly between .06 Cents .08 cents.

I would suggest you to :
write an optimized copy
increase your monthly budget
Reduce your Maximum cost per click.

This gives more rotation of the ads